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Parents, This is the Easiest Way to Double Your Car Insurance Rates

 

Adding your 16-year old to the family car insurance will likely add hundreds, possibly even $1,000 or more, to your auto insurance bill—even if they have a perfect driving record.

A survey out Monday from InsuranceQuotes.com finds that adding a 16-year old driver to the average married couple’s car insurance nearly doubles (96% increase) the cost. Even as your teen ages, the rate hikes remain high: the average impact of having a 19-year-old on your plan is a rate increase of 60%.

The reason for these extreme rates hikes? Risk. “Teen drivers are some of the most risky drivers on the road,” explains Laura Adams, senior analyst, InsuranceQuotes.com. That’s particularly true of boys: Adding a teen male to our plan increases rates by 92% (compared to 80% increase on average for 16 – 19 year olds) vs. just 67% for girls, though six states (Hawaii, Massachusetts, Michigan, Montana, North Carolina and Pennsylvania) prohibit insurers from using gender in rate calculations.

In some states, these rate hikes are even more extreme. In New Hampshire, you’ll see your rates jump 115% when you add a teen – and they’ll more than double in four other states: Wymoing (104%), Illinois (104%), Maine (103%) and Rhode Island (102%). Meanwhile, rate hikes are far less extreme in Hawaii (17%), New York (53%) and Michigan (57%).

So what does this all mean in terms of dollars? If you live in Rhode Island, this could add an average of $1000+ to the average plan. And residents of Connecticut, Louisiana and Washington D.C. don’t fare much better at $900+ extra per year.

No matter where you live, adding a teen to your plan is likely to add hundreds of dollars to your annual expense. So we asked experts the best ways for parents to save on car insurance.

Have your teen take a defensive driving course. Adams says these courses sometimes shave 10-15% off the cost of your insurance – and they can cost as little as $25 and can sometimes be taken online. She cautions that you should first call your insurance company to see which of these courses are approved by them.

Purchase policies that include accident and ticket forgiveness. “A new driver with a speeding ticket or an at-fault accident can double your rates,” explains Joshua Lavine, president of Capitol Benefits, LLC in Gaithersburg, Maryland. “For an extra $100 to $200 per year you can save yourself thousands of dollars by preventing huge rate increases after an incident.”

Prove your teen gets good grades. Adams says the many insurers offer a discount – sometimes up to 25% off – for teens who get good grades (usually a B and up) in school; call your insurer to ask how you prove the good grades.

Participate in a program that monitors driving habits. If your teen is a good driver, this can help lower rates. You will get a small device that plugs into your car that monitors how you are driving. “This is also a great way to reinforce safe driving habits with newer drivers,” says Lavine.

Up the deductible. “Look at increasing the deductibles on collision coverage up to $1,000 on the cars that are driven by the new driver,” says Lavine. “This is where most of the premium associated with young drivers is and you can often come out ahead with the higher deductibles and lower premiums if you are accident free for a year or more.”

The Balance is a MarketWatch column on the art of juggling family, work and life.